Ads In A Quality Score World

Next on today’s agenda is the super-packed Ads in A Quality Score World session. The panel is being moderated by Gord Hotchkiss with speakers Joshua Stylman (Reprise), Andrew Goodman (Page Zero Media), and Jonathan Mendez (OTTO Digital)

This morning’s session was pretty important because it reflects the change in search marketing we’ve been seeing over the past few years. As the speakers pointed out, your rankings in paid search are being less about how much you page and more about your ad’s perceived relevance. This morning’s panel was all about understanding the factors that go into the engines’ quality score algorithm in order to increase your ad’s perceive relevance and getting those high-positioned bids.

Up first is Joshua Stylman to explain this whole quality score thing and help the audience put it in context. (I must note, I apparently missed the “get here 30 minutes early” memo so I’m so far back I can’t even see Joshua. In fact, I’m not even in the same room as the one he’s speaking in. However, I’ve been assured he really is standing there so let’s hope this isn’t a really elaborate set up.)

Back to the session, Quality Score is a way for search engines to rank their ads based on a variety of factors. Google, MSN and Yahoo are all now using a quality score system instead of the bid-based system that was used when pay per click was just a baby.

When Google released its AdRank model circa 2005, it confused advertisers because Google didn’t tell them what the exact variables that went into the ranking system were. Thankfully, now that time has passed and we have a little more information.

Google uses historical data to determine whether or not a keyword is relevant to an ad, which in turn determines what you’ll have to pay to rank for that keyword. The up-side to this is that it produces a better user experience, more qualified leads and more revenue for the engines. The down-side is artificial CPC inflation, that the engines are able to define ad quality (which Google’s Nick Fox disagrees with) and that any change advertiser’s make can affect and reset their quality score (i.e. testing is penalized).

Joshua also argues whether abiding by Google’s quality laws really increases the relevancy of your ads. His argument is that perceived relevancy is very often different than what your customers would value as relevant. Joshua found that by molding his ads to fit Google’s perceived relevancy scale, it actually made his conversion rates decrease. What good is a lower CPC rate if you’re losing out on conversions?

None.

Search marketers need to continue to study landing pages to find out what works best for them. As Joshua says, it’s what puts the ‘M’ in search engine marketing. Rock on, Josh!

Another interesting tidbit noted by Joshua is that under Yahoo's Panama, branded terms have seen a 25 percent increase in CPC. He found that branded terms dropped 58 percent, while un-owned brands CPC increased 42 percent. It makes sense…almost. Naturally, if Guess is going after the term “Guess”, their cost will be less because the term is seen as very relevant to their ad/brand. However, that also means Macy’s will have to pay more because they’re “less relevant” than Guess. This seems almost like a penalty. If you’re looking for Guess jeans (by the way, the early 90’s called and they want their style back), is a Guess store more relevant to your needs than Macy’s? Not necessarily. It may even be more relevant if you’re on a budget.

Next up is Andrew Goodman

Andrew starts by outlining the three generations of paid search advertising.

GoTo.com/Overture: pure bid for placement model.

AdWords 2.0: Max Bid X CTR

AdWords 2.5: Quality Based bidding

Obviously, right now we’re living in the world of quality based bidding and Andrew goes on to explain the two different types of quality sores – one affects your minimum bid and the other affects your rank.

The latter is most relevant for new accounts. When you have a history CTR things will become more stable. In the beginning, the engines are trying to determine what your potential CTR will be, as well as your relevancy for the keywords as they related to the ad and your landing page.

However, if you’re evil, there is no sanctuary (muahaha!). If you’re participating in privacy intruding data collection without disclosure, creating nasty multiple accounts or doing other bad things that would make your mother smack you upside the head, your ads aren’t going to be positioned well, if they show up at all.

Jonathan Mendez is up next, and says contrary to what we just heard there are three quality scores. The two Andrew listed above, as well as a content quality score which takes landing page relevance into high consideration.

Why are the engines creating multiple quality scores? Because it improves the quality of the ads being produced (according to the engines).

Jonathan warns audience members about being too concerned with their score. Personally, I like Jonathan’s approach. If you concentrate your efforts on delivering relevancy through your keywords and your ad, your quality will improve and so will your results. It’s the same thing with search engine optimization. Instead of going crazy trying to identify every little factor the engines are looking for (that’s our job) concentrate on making your site a subject matter expert for users. The other stuff will follow.

Relevancy is about how well you fill the needs/intent/goal of the user. Understanding the way users are going about their goals is the first step in being relevant.

Paid search is built for relevance. It is a segmentation engine that uses channels, campaigns, AdGroups and keywords. Ads are the bridge or relevance between the query and the landing page. You want to create ads to get attention, generate interest, set expectations and persuade the user in some manner.

Make sure that your ad copy is relevant to your keywords, and that the keywords you’re using are targeting the same kind of user. Don’t mix buying and research keywords in the same ad.

To determine the relevancy of your ad you have to look at your conversion rate, not necessarily at your click through rate. Interesting to note, your ad description has a higher influence of conversion rate, not the title. If you can create an ad that stands out, you can create something that is valuable and relevant to users.

To create effect ads, advertisers must:

Understand user intent with query

Segment keywords based on intent

Target ad based on segments

Optimize CTR and CR

Reinforce relevance on landing pages

Message to needs of users (not your needs)

And always be testing and optimizing!

Nick Fox (Google), Brian Boland (Microsoft) and Gulshan Verma (Yahoo) are here to represent the search engines and participate in Q&A and had some great things to say.

Nick states that contrary to popular belief quality score is not a black box. Today’s presentations captured the essence of what Google is trying to do with their quality algorithms. Don’t worry about quality score, just focus on relevance and everything else will follow.

Also, don’t be afraid to experiment. Though we’ve heard this can be dangerous, Nick says Google encourages advertisers to experiment and improve their keywords, copy, landing page copy, etc, especially if you feel like you’re being penalized by a lower quality score. If you experiment and find the results are bad, you can always revert back to the original and you won’t be penalized. There is nothing to lose.

Clearing up another myth, Nick assures readers that it’s the users who are defining quality. Click through rate is a great metric to see if users are demonstrating interest. Google is trying to capture the essence of what users are telling them about relevance and then incorporate that into the algorithm.

Microsoft’s Brian Boland announced that Microsoft is going to release a quality based ranking component in the next few weeks, so keep an eye out for that.